U.S. giving surges – Individuals fuel increase

Mirroring unprecedented economic growth and individual wealth, charitable giving in the U.S. is on a roll.

Giving last year grew 9.1 percent to nearly $190.2 billion, or 2.1 percent of gross domestic product, a new study says.

It was the second straight year that giving grew by more than $15 billion and represented 2 percent or more of the national economy, the AAFRC Trust for Philanthropy says in Giving USA 2000, its annual report on U.S. philanthropy.

Individuals, who contribute the bulk of American philanthropy, fueled most of the increase, $11.6 billion.

Giving by living individuals grew 7.2 percent to $143.7 billion, while giving by bequest grew 14.6 percent to $15.6 billion.

Giving as a percentage of personal income grew to 1.8 percent in 1998 and 1999, up from 1.5 percent in 1995.

Overall, giving by living individuals represents 75.6 percent of U.S. philanthropy.

“Personal giving creates a ripple effect that goes beyond the increase of a particular year,” the AAFRC Trust for Philanthropy says. “Individuals make contributions to foundations, and these contributions subsequently begin to flow out to the nonprofit sector as grants.”

In addition, the group says, contributions made to foundations are invested, increasing the value of the original gift.

Foundation endowments were boosted by the strong economy and individual contributions.

Corporations and their foundations gave more than $11 billion, up nearly $1.4 billion from 1998.

Corporate giving grew to 1.3 percent of pre-tax profits, up from 1 percent in 1996.

“This is particularly impressive because the value of corporate philanthropic contributions and corporate foundation grants is only part of corporate support of nonprofits,” the AAFRC Trust says. “Marketing dollars and other expenditures also benefit charities, even though they are not charitable gifts.”

Giving to religion, which received the biggest share of all giving, 43 percent, grew by $4.3 billion to $81.8 billion.

Giving to education grew by $2.1 billion to $27.5 billion, or 14.4 percent of the total.